CTL Strategies ranked by Asia Law Profiles as a leading tax law firm in the Maldives
The Asia Law Profiles have ranked CTL Strategies as the leading law firm in the areas of taxation in the Maldives. It has also recognized us as the highly recommended firm in the areas of litigation and disputes.
The team at CTL Strategies has been praised by their clients as “dedicated and professional” in representing them in foreign investment and, cross-border taxation matters. The firm has a notably stellar reputation amongst local and multinational businesses in the Maldives, for managing and handling tax controversies and corporate litigation.
25th Amendment to the Goods and Services Tax Regulation Published
On 12 February 2020, the 25th Amendment to the Goods and Services Tax Regulation (Regulation Number 2011/R-43) was published in the Government Gazette.
The amendment repealed Section 12(d) of the GST Regulation which defined “date of commencement of import activity”, for the purpose of Section 51(g) of the GST Act, as the date a person is granted a permit to import goods by the relevant Government authority. Hence, with this amendment, the requirement to register for GST within 30 (thirty) days from the date you are issued with an ‘import license’ no longer exists. However, this should not be mistaken for the mandatory GST registration requirement imposed under Section 51(a)(4) of the GST Act on persons importing goods into the Maldives – the registration requirement remains the same.
In addition to the above, the amendment also revoked Section 15(f) of the Tax Ruling TR-2015/G23 (Documents to be submitted with GST return) which obliged registered person with an annual turnover of less than MVR 5 million to submit Input Tax Statements and Output Tax Statements to the MIRA through the MIRAconnect Portal; via email; or on a portable storage device starting from 1 January 2019. This means that taxpayers with an annual turnover of less than MVR 5 million can choose to file their tax returns over the counter.
The amendment takes effect from 12 February 2020.
Maldives Foreign Direct Investment Policy Published
A Foreign Direct Investment (FDI) Policy which would govern the approval guidelines in relation to foreign investments in the Maldives has been published. The new policy consolidates existing FDI approval practices and introduces new policy changes. The main objective for publishing the policy is to set out the regulatory requirements and procedures in relation to FDI transparent and certain/predictable.
The new policy introduces an Automatic Route and a Government Route for FDI. These routes are subject to the FDI Entry Requirements (which include the maximum shareholding percentage, minimum investment amount and duration of foreign investment) detailed in Annex I of the policy. Provided the qualifications in FDI Entry Requirements are met, under the Automatic Route, foreign investment approval will be automatic/guaranteed. However, under the Government Route, approval will not be automatic/guaranteed and will be at the Government’s discretion.
Other notable changes under the policy include, guesthouse business being opened for foreign investment, which was previously 100% restricted for FDI. Pursuant to the new policy, foreign investors can now hold up to 49% shares of a company conducting guesthouse business.
The Ministry of Economic Development also has set certain service benchmarks for the approval/registration of FDIs under the new policy (i.e. under Automatic Route 2 working days and under Government Route 5 to 14 working days).
The policy came into force effective 11 February 2020 and all new foreign investment applications submitted after this date will be subject to the new policy.